Honeywell's turbo unit expects big gains from spinoff

gers/201607/02/37773.html">Honeywell International’s plan to spin off its turbocharger business will cause it to cut ties with a division with annual revenue of about $3 billion.

The man leading the turbo-heavy Honeywell Transportation Systems unit, Olivier Rabiller, welcomes the changes. He is also identifying ways to benefit from the move to autonomous and connected cars. The most recent example is the announcement that Rabiller’s business would collaborate with Lear on in-car cybersecurity to keep hackers out of tomorrow’s vehicles. Rabiller spoke about how this and more with Automotive News Europe Managing Editor Douglas A. Bolduc.

How is the spinoff going to change Honeywell Transportation Systems division?

As was the case before we announced the spinoff, we plan to remain a technology leader on the turbo side as well as fund our new growth areas. The spinoff gives us the opportunity to accelerate this because as an independent company you make our own investment decisions. The second thing is that we are the only business working in the automotive industry. There were no go-to-market synergies with the other businesses. Overall, the spinoff is a recognition that Transportation Systems is a successful business and it is in the best interest of Honeywell to position this business to be even more successful in the future.

Your division has benefited from Honeywell’s aerospace division in a several areas including your move into electrification. Will that door close once the spinoff is completed?

There are some details related to the spinoff that we cannot share until later. What I can say is that when it comes to electrification, it is true that when we re-started that journey two to three years ago we initially leveraged some of the skills from the aerospace business. Since then, we have become self-sufficient in terms of electrification. Today, we are developing our own controllers, our own software to manage the controllers and even the electric motor technology. We have 50 engineers working on state-of-the-art electric machines. That was not the case two or three years ago.

If door to the aerospace division is closed, can you continue to succeed?

Yes. But the door will not be closed. We will define the way it will work at a later stage.

When will the change happen?

The timing is by the end of 2018. At this stage, I can’t say anything more. We will share more details when we have them.

Will the name change?

I’m not saying we have to change it. We will, however, have to define what our brand name will be moving forward.

What are you telling your employees and customers to make sure there are no misunderstanding about this move?

We have told them that the company doesn’t stop because it is undergoing a spinoff. By the way, only a very limited number of people inside the company are working directly on this. The rest are focused on delivering what our customers need and delivering the new technologies that we need for the future. There is no change in the way we operate.

What percentage of people are fully engaged in the spinoff?

It’s less than 10 percent.

"We see electrification as an enabler and as an opportunity," Rabiller said

How has being part of Honeywell helped your turbo-heavy business to this point?

As we started to develop new technologies to prepare for the demand we saw coming for electrification and automotive software, we were able to borrow from the broad technology portfolio at Honeywell, which was already providing these technologies to other industries. This helped us develop our own competencies and skills, such as own software monitoring capabilities, so that they fit the auto industry’s needs. Our new software offerings include what we call IVHM [integrated vehicle health management] as well as cybersecurity applications.

How is Honeywell Transportation Systems preparing for the move away from fuel-powered cars to battery-driven vehicles?

We see electrification as an enabler and as an opportunity. With 48-volt electrical architectures, we start to have the power in the car that wasn’t there before. This lack of power was a limiting factor in the past. The level of power you can get into the electric machine is much higher. That makes a big difference. We have been preparing for this move for years by developing electric boosting solutions including e-compressors and e-turbos. Some of that work has been on display in Formula One. We continue to work with Ferrari on its hybrid powertrain.

Why does it make a difference to have 48 volts?

You've seen the emergence of superchargers or e-compressors, but the next big thing is to integrate everything because when you have an e-compressor, you still need a traditional turbo. That's a complex two-stage system with two distinct machines and all the plumbing that goes with it. One solution is an e-turbo that combines the units into a single product. An e-turbo not only uses the available electrical power to improve engine performance, but it can return excess energy back to the 48-volt system, which helps support the vehicle’s overall operation.